Gilts have managed to step off.........>

GILT SUMMARY: Gilts have managed to step off session lows but remain under light

pressure as risk-on tone dominates Tuesday's morning session. he 5-yr to 10-yr

part of the yield curve is underperforming the short and ultra long-end of the

curve.

- 2-yr Gilt yield is +2.1bp at 0.828%, 5-yr +2.8bp at 1.194%, 10-yr +3.1bp at

1.518%, 30-yr +2.3bp at 1.924% and 50-yr +2.2bp at 1.718% according to Tradeweb.

- Gilts fell at start of London session, weighed by risk-on sentiment as BTPs

saw a light relief rally and some market positioning ahead of UK public sector

borrowing numbers and comments from BoE MPC members.

- There was nothing too surprising in the minutes of the DMO GEMMS meeting,

however, less public borrowing in April and downward revision to FY2016/17

borrowing led to June Gilt future ticking off session lows. 

- BoE carney said that the majority of the MPC is opposed to publishing a rate

forecast, but Vlieghe came out in favour of it. The overall message from the

no-change camp was that they could wait and see on data before deciding to hike

rates again. Sstg strip is steady to 3 ticks lower, curve touch steeper.